Regency Fincorp Ltd (REGENCY) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, we'll continue with the conference call shortly. Please stay connected. Thank you for your patience. We're connected with the management now.
Harshit Ghanshyani (Adfactors PR): Good evening, everyone. Welcome to the conference call of Regency Fincorp Limited for the second quarter and six months ended September 30, 2026.
Moderator: Ladies and gentlemen, good day, and welcome to Q2 and H1 FY '27 earnings conference call of Regency Fincorp Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harshit Ghanshyani from Adfactors PR. Thank you, and over to you, Mr. Ghanshyani.
Harshit Ghanshyani (Adfactors PR): Yeah. Good afternoon, everyone. I'm Harshit Ghanshyani from Adfactors PR, Investor Relations. On behalf of Regency Fincorp Limited, it's my pleasure to welcome you all on the Q2 and H1 FY '27 earnings conference call. Joining us on the call from the management team, we have Mr. Gaurav Kumar, Managing Director, and Mr. Sarfaraz Malik, Chief Financial Officer and Whole Time Director. We'll begin today's call with opening remarks from the management, following which we will open the floor floor for Q&A session. Before we begin, I would like to remind everyone that certain statements made during this call maybe forward-looking in nature. These statements are based on the management current expectation and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. Regency Fincorp Limited undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent events or development. With that, I would like to hand over the call to Mr. Gaurav Kumar to deliver his opening remarks. Thank you, and over to you, sir.
Gaurav Kumar (Regency Fincorp Ltd): Yeah, thank you. Good afternoon, everyone. And thank you for joining us today for Regency Fincorp Limited Q2 and H1 financial year '27 earning call. We appreciate your continued interest in the company and look forward to sharing our progress as we advance our long-term growth strategy. Q2 and H1 FY '27 marked a strong phase of growth the company driven by the significant expansion in our lending portfolio, increasing geographical presence, deeper market penetration, and continued strengthening of our core business segments. Our assets under management stood at INR 610.24 crore as of 30th September 2026. We continue to focus on building a diversified lending franchise with secured MSME lending and digital lending forming the key pillars of our business. Our digital lending platform CashMySalary continues to expand its reach serving customers across 26 states and four Union Territories and spanning over 15,250 PIN codes. This reflects the scalability of our technology-led model and our ability to extend credit access without a proportionate expansion to in-branch infrastructure. Alongside business expansion, we are investing in technology, talent, and infrastructure to strengthen our operating capabilities. We have expanded our digital team and moved into a large office space in Noida to support our growing operations. With an in-house team strength of 390 employees, we are building the organizational capacity required to support our next phase of growth. We are also deploying AI-enabled EMI EMI reminders, and digitizing disbursement, e-KYC and e-sign processes to improve tional efficiency and scalability. On the strategic front, our focus remain on strengthening our secured MSME lending franchise, scaling our digital lending capabilities, and diversifying our portfolio through complementary business opportunities. Our technology-led business model enable us to expand our reach efficiently while increasing our physical branch network. We continue to strengthen our digital branch expansion, leveraging technology to reach customers without the need for the physical offices. This approach supported by disciplined lending practice allows us to build a scalable and sustainable business for long term. The broader industry environment also present
Gaurav Kumar (Regency Fincorp Ltd): opportunity for technology-enabled lender. India's expanding digital financial infrastructure and growing fintech ecosystem are improving access to formal credit. We believe these developments create opportunity for NBFC to address the financing need of underserved MSME and retail borrowers. In this evolving landscape, we believe our secured MSME franchise, digital lending capabilities, investments in people and technology and proposed strategic acquisition position us to participate in the expanding credit market. With that, I would now like to hand over the call to Mr. Sarfaraz Malik, who will take you through our detailed financial performance and growth outlook. Over to Mr. Sarfaraz Malik.
Sarfaraz Malik (Regency Fincorp Ltd): Thank you, Gaurav, for this outline and strategical priorities that we are building in the company. Let me take you through our key business developments that we have been gone through, and I will also take you through our financial performance for the quarter two and H1 of financial year 2027. Which reflects the momentum in our lending operations and benefits of our expanding business. Our asset under management grew more than threefold year-on-year as on September 2026. The secured loan book grew from seven times year-on-year to 452 crores, compared to 60.5 crores as on 30th September 2025, reflecting our continued focus on building a high quality collateral-backed MSME lending portfolio. During H1 financial year 2027, our digital lending platform CashMySalary recorded a disbursement of 125 crores with more than 87,000 loans, active loans, across 15,000 pin codes with 25 states. Further strengthening our digital lending platform, we also launched ZFund, a digital platform offering instant salary advance and personal loan from a range of 20,000 to 1 lakh with quick approval and 24/7 disbursement available. Our secured MSME lending business also continued to expand with cumulative disbursement of approximately 252 crores as on September 2026, across 2,366 active loans. Property-backed up lending remains center to this business, supported by a branch-led distribution model and a disciplined credit assessment. Turning out to our quarterly performance, total income of quarter four financial year 2026 stood at 32.44 crores, registering YoY growth of 240%, supported by the expansion of our loan book and growth in earning assets. Profit before tax stood at 9 crores, which is up by 170% on YoY basis. For H1 financial year 2027, total income grew to 163%, YoY growth is about 49.87 crores, while profit after tax increased to 146%, which is to 16.3 crores. Notably, both total income and PAT for the first time, first half yearly already surpassed their respective financial year 2026 figures, reflecting business expansion, operating leverage and cost management in place. Our profitability metrics also improved during this period. The net interest margin increased to 7.54% in the H1 FY '27 from 3.51% in H1 FY '26, supported by a high yield portfolio mix and a lower blended cost of funds. Asset quality remained within our target range, with gross NPA numbers at 0.9%, 99% and net NPA numbers at 0.75% as of September 2026. On the front end, on the funding frontend, we raised around 425 crores through NCDs and term loans during H1 FY '27, supporting our current growth phase
Sarfaraz Malik (Regency Fincorp Ltd): outstanding borrowing today stands at 505 crores, as on 30th September 2026. Our capital adequacy ratio today stands at 28.55%, while our debt-to-equity ratio stood at 2.66 times, providing a capital base to support our lending operations and planned business expansion. On 16th October 2026, the board approved a proposed preferential issue of approximately 312 crores. The proceeds are intended to support the acquisition of a digital lending platform, the acquisition of a gold loan business, onward MSME lending, and for general corporate purpose. These initiatives are aimed at our own lending capacity, diversifying our portfolio, strengthening our market presence, subject to the requisite approval and completion of a proposed transaction. Following the proposed preferential issue, our net worth is expected to increase from 190 crores to 290 crores by March 2027, strengthening our capital base and providing great capacity to support further growth. This net worth in March 2028 is expected to reach 615 crores once the entire preferential has been fully paid up. We intend to utilize these proceeds initially towards acquiring a digital lending platform to strengthen our technology-led lending capacity and expand our customer reach. Subsequently, we expect the proposed gold loan business acquisition to progress over the next three to four months, subject to necessary approvals and completion of the transaction. This will allow us to enter the gold-backed lending segment and establish a new lending vertical. Gold provides tangible collateral for lending, and we believe this addition will diversify our portfolio, strengthen our secured lending capacity, and build a strong foundation for sustainable growth. Our growth strategy continues to focus on three priorities: scaling secured MSME lending, expanding digital lending, and diversifying our portfolio through strategic acquisitions. The proposed acquisition of a digital lending platform and a gold loan business are expected to complement this capacity and broaden our revenue streams. Further to it, looking ahead, we remain confident in our growth trajectory, and we are targeting an AUM of approximately 900 to 950 crores by the end of the financial year 2027. Alongside this expansion, we aim to achieve a profit after tax within the range of 40 to 42 crores or higher for the full financial year, supported by the continued growth of our lending business. As we pursue these opportunities, our priorities remain disciplined execution, prudent underwriting, a strong collecting framework, maintaining asset quality, and optimizing fund cost. We remain focused on translating our growth momentum into sustainable financial performance and long-term value for our stakeholders. With that, I would like to conclude my remarks and open the floor for question-and-answers.
Moderator: Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Shah from Ace Securities. Please go ahead.
Amit Shah (Ace Securities): Hello. Hi, sir. Sir, I had a couple of questions. Firstly, sir, on GNPA,
Sarfaraz Malik (Regency Fincorp Ltd): Sure.
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